The Influence of the IHSG, BI Rate, Exchange Rate, and Indonesian Government Bond Yield on Foreign Portfolio Investment in Indonesia

Rio Ferdinand Simarmata; Riko Setya Wijaya; Putra Perdana

doi:10.55927/ijbae.v4i4.216

Authors

Rio Ferdinand Simarmata Universitas Pembangunan Nasional “Veteran” Jawa Timur
Riko Setya Wijaya Universitas Pembangunan Nasional “Veteran” Jawa Timur
Putra Perdana Universitas Pembangunan Nasional “Veteran” Jawa Timur

DOI:

https://doi.org/10.55927/ijbae.v4i4.216

Keywords:

Foreign Portfolio Investment, IHSG, BI Rate, Government Bond Yield

Abstract

Foreign portfolio investment in Indonesia refers to the placement of funds by foreign investors in domestic financial instruments. This study aims to analyze the influence of the Indonesia Composite Stock Price Index (IHSG), interest rate (BI Rate), exchange rate, and the yield of Indonesian government bonds on foreign portfolio investment, both in the short and long term. The data were obtained from Bank Indonesia, BPS, and Investing.com, covering the period from the first quarter of 2014 to the fourth quarter of 2023. The study employs a quantitative approach using the Error Correction Model (ECM) method. The results show that in the long term, the IHSG and exchange rate have a positive and significant effect, while in the short term, only the BI Rate shows a positive and significant influence.

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